HCMC approves big cuts in 2010 budget

The Hennepin County Medical Center, the state's largest safety net hospital, will close at least two clinics, eliminate more than 150 positions and restrict access to its non-emergency services under a budget approved Wednesday.

"This combination of cuts, closings and deferring necessary improvement projects reduces our projected 2010 budget gap to $25 million, but it is at the expense of programs that serve our patients," said Chief Executive Officer Arthur Gonzalez in a prepared statement.

The hospital is the largest provider of health care to the state's poor and uninsured and has been hard hit by Gov. Tim Pawlenty's elimination of the $381 million General Assistance Medical Care program for poor adults in May to help balance the state budget.

HCMC assumes it will lose $43 million due to the elimination of that program in 2010 and $50 million in 2011, by far the largest losses of any single institution in the state. At the same time, it assumes its cost for treating uninsured and underinsured patients will rise.

The $536.6 million operating budget includes a 5 percent price increase but still leaves the hospital $25 million in the red at the end of 2010. However, it should have enough cash to pay its bills.

That's after the system cuts 150 to 200 positions to save $15 million and closes its Senior Care Clinic at its downtown Minneapolis campus.

The 500 patients who use the clinic will be shifted to other HCMC clinics in Minneapolis. It will also close its smaller cardiac rehabilitation clinic, and other closings are being considered.

The budget also calls for the clinics to stop treating uninsured patients who don't live in the county starting in April, although the emergency department will remain open to them.

Last year, the hospital treated 7,300 patients from 67 Minnesota counties who were either uninsured or covered by the general assistance program.

Minnesota Hospital Association President Lawrence Massa said HCMC's troubles worry health care executives statewide because of the central role played by the medical center and the state's other big safety net hospital, Regions Hospital in St. Paul.

Rural hospitals regularly refer their sickest patients to the top-rated emergency departments at Regions and HCMC. Regions has a noted burn center. HCMC's residency programs train doctors that staff hospitals throughout Minnesota.

"Everybody in the state benefits from having those services available and they're threatened when these sorts of things happen," Massa said.

Regions expects to lose about $24 million in GAMC funding. It's expected to announce how it will close the gap in the next few weeks.

State agencies have already taken steps to soften the blow to state hospitals and the more than 30,000 people whose GAMC coverage runs out March 1. The Minnesota Department of Human Services recently outlined a proposal to move nearly all of them to another health plan.

The agency plans to automatically transfer 28,000 people from GAMC into MinnesotaCare, a bigger subsidized plan for the working poor. Another 8,000 GAMC enrollees already are switching or dropping coverage.

Hennepin County Chairman Mike Opat, also an HCMC board member, doubts the Human Services Department's plan will work well for hospitals or GAMC patients. For one thing, he said, MinnesotaCare caps payments for hospitalizations at $10,000 a year and requires patients to pay small premiums; GAMC is far more generous and doesn't have premiums.

"Over 50 percent of our GAMC population comes through the emergency room and requires a hospitalization," Opat said. "They are usually north of $10,000, so it won't cover all the costs."

He said the Hennepin County and hospital boards are working with lawmakers on a proposal that could avoid the worst cuts in HCMC's 2010 budget.

Democratic state lawmakers have been developing a plan to extend a pared-back set of health care benefits to the sickest GAMC patients while providing catastrophic hospital coverage for the healthiest. They are expected to roll out details in the coming weeks.

HCMC's budget now goes to the Hennepin County Board, which will make a final decision in December. HCMC's fiscal year starts in January.

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Associated Press writer Martiga Lohn contributed to this report from St. Paul.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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